The fates of three local banks are unknown as the Bank of Ghana’s (BOG) deadline for recapitalisation elapsed three days ago.

The three local banks according a source were unable to meet the GhȻ400 million threshold at the close of business day, December 31, 2018.

Uncertain fate

It is uncertain if the central bank would liquidate them or intervene as has been done for some seven local banks that could not raise the amount.

However, according to Ghanaian Times sources, one of the three banks could be relegated to a savings and loans company.

Seven banks to receive support

The source said that the seven banks that would receive support are ADB, Heritage, Prudential, Premium, National Investment Bank, Universal Merchant Bank and the Omni Banks.

The government, with support from some investors, would raise about GhȻ2 billion for the banks through the issuance of bonds as they were well-governed although insolvent.

As barter for their investment, parts of the beneficiary banks likely would be possessed by the investors through a Special Purpose Vehicle (SPV), according to the sources.

Takeovers

The local branch of Indian Bank, Bank of Boroda, due to its inability to meet the GhȻ400million threshold last Monday voluntarily folded up. Its customers of the bank are to be ‘taken over’ by Stanbic Bank of Ghana.

The bank which was primarily serving Indian customers started operations in the country 10 years ago and is the first bank to willingly liquidate in the country.

GHL Bank, a mortgage provider, formerly known as Ghana Home Loans is to be taken over by the First National Bank; the two are at the early stages negotiations.

Mergers

Four banks have decided to pair up to avoid the wrath of the Central Bank. Energy Commercial Bank Ghana is expected to merge with First Atlantic Bank Limited while Omni Bank and Sahel Bank are teaming up.